November 4, 2013

CRONY CORPORATISM: If Big Pharma likes your healthcare plan, you can keep it. “Almost always, the rules ended up how they ended up because special interests with insider access were able to tweak them. So it is with the coverage that Obamacare mandates. HHS’s first proposed rule on prescription drug coverage required insurers to cover at least one drug in every class of drug — in short, one drug for cholesterol, one drug for epilepsy, etc. Drugmakers wanted more. Led by the lobby group Pharmaceutical Research and Manufacturers of America, the industry argued that HHS should require all insurers to not only cover one drug per class, but also to match the benchmark plan in their state. And Big Pharma won. . . . So if your insurance plan met state mandates and covered one or more drug per class, it still might be illegal if it didn’t cover as much as the “benchmark” insurance plan. PhRMA and its member companies like Eli Lilly and Pfizer care about this in part because more bare-bones prescription drug plans may cover only generic drugs and not the more costly name brand drugs covered by the benchmark plans. The more comprehensive the drug coverage, the more expensive the premiums — thus the cancellation of many low-premium plans. This wasn’t the only win for drugmakers in Obamacare, of course. The industry famously got a prime seat at the drafting table of Obamacare (and thus a slew of subsidies and favors) in exchange for millions of dollars in ads supporting the legislation — and ads backing the Democratic senators endangered by voting for it.”

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